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Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I sincerely congratulate my hon. Friend the Member for City of Chester (Christian Matheson) on securing the debate and his excellent contribution, and all Members on their contributions on such an important topic.
The hon. Member for Ross, Skye and Lochaber (Ian Blackford) mentioned the Resolution Foundation paper that was published yesterday. I used to work on inequality and there are a variety of ways of measuring it. He was probably talking about the Gini coefficient, which has been relatively flat over the past decade or so, but other data, such as those on the extremes of wealth in the top 1% compared with the bottom 1%, vary considerably. I will look at those data in a moment, but they show inequalities that hark back to the Victorian age. In fact, the International Monetary Fund has said that income inequality is
“the defining challenge of our time.”
In the UK, 40 years ago, 5% of income went to the highest 1% of earners; today, 15% does. But this issue is about not just income but wealth. If we think back a few weeks to when the Panama papers were published, they revealed the shocking extent to which the assets of the richest are kept in offshore tax havens, where tax is avoided and evaded. According to the Equality Trust, another good source of data, in the past year alone the wealth of the richest 1,000 households in the UK increased by more than £28.5 billion. Today, their combined wealth is more than that of 40% of the population, which is equivalent to 10.3 million families—so, the wealth of 1,000 families is equivalent to that of 10.3 million families. While the wealth of the richest 1% has increased by 21%, the poorest half of society saw their wealth increase by less than a third of that. I could go on, but I have set the context.
Looking over the past six years at the regressive Budgets of this Government and the previous coalition Government, we should not be surprised. As the Institute for Fiscal Studies has shown, last month’s Budget left people on low and middle incomes proportionately worse off as a result of tax and social security changes, which is what we are discussing today. Regressive economic policies that mean that the total tax burden falls predominantly on the poorest, combined with low levels of public spending, especially on social security, are key to establishing and perpetuating inequalities. In particular, those on low incomes, the sick and the disabled have been hammered by this Government.
Since the Welfare Reform Act 2012, according to analysis by Demos and Scope, 3.7 million sick and disabled people have had approximately £28 billion in social security support cut. That does not include the cuts that we have seen to social care, access to transport and support for disabled children in schools—right across the piece, disabled people have been hammered. The Welfare Reform and Work Act 2016, which has only just been given Royal Assent, will compound the effects of those cuts. The cut of £1,500 a year for people on ESA WRAG—the work-related activity group—and the UC equivalent who have not been found fit for work is an anathema.
There is clear evidence from the Extra Costs Commission, as we have heard, that sick and disabled people face additional costs—estimated at £500 a month—because of their condition. The effect of further cuts in support will be to plunge even more sick and disabled people into poverty. We know that 5 million sick and disabled people are already living in poverty; what we do not know is how many more will be pushed into poverty as a result of those measures, because the Government have not assessed that. It is shameful that the Government have not done so, or even looked at the implications for people’s condition.
I am sure that the Minister will respond by saying that the Act is about incentivising sick and disabled people into work, but again we have contradictory evidence from various reports. In connection with the disability employment gap, which remains stubbornly high, only 124 employers signed up to the Disability Confident campaign—
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
indicated dissent.
Debbie Abrahams
That is the latest figure from the website. Also, last year, fewer than 37,000 disabled people received support from Access to Work, out of the 1.3 million disabled people who are fit and able to work. Much, much more needs to be done. It does not stop there. Other cuts have included the bedroom tax, cuts to supported housing through the local housing allowance and the 1% cut in housing benefit—there has only been a reprieve for the next 12 months. I could also mention other cuts and policies such as sanctions. Those are all having and will continue to have an adverse effect on the sick and disabled.
This is the first time that the Minister and I have debated since the recent change in leadership at the Department. The new Secretary of State made sympathetic overtures in his statement to the House, and I welcome the Government’s U-turn on the cut to the personal independence payment proposed in last month’s Budget, but as the Channel 4 “Dispatches” programme a couple of weeks ago showed, the PIP assessment process is clearly not fit for purpose. According to a number of my constituents—if I have time, I would like to mention a couple of them—
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I pay tribute to the hon. Member for City of Chester (Christian Matheson), who I know is widely respected in his local community. He is very passionate about this issue and raised a number of powerful points, as did many of the other hon. Members who contributed to what has been a good, constructive debate. In true tradition, I have not brought a pre-written speech but will do my best in 10 minutes to respond to as many of the points raised as possible.
I will start with PIP. A lot of the issues raised cut across many different Ministers’ areas, so I will spend the majority of my time on the areas for which I am responsible. PIP is my area. Time and time again, hon. Members say that life would have been better under DLA. The fact is that under DLA, 16% of claimants qualified for the highest rate of benefit. Under PIP, it is 22.5%. We are getting money to those who are most in need. That figure is even more stark if we look at things such as hidden impairments, including mental health issues. Under DLA, 22% of claimants with a mental health condition would expect to get the highest rate. Under PIP, that figure is 68%.
We continue to work with stakeholder groups and those with front-line expertise in order to continue improving the PIP assessments. It is fair to say that when PIP was introduced, Ministers were often in this Chamber explaining why things were not going right, but we have now been in a settled position for about a year. Currently, someone would be looking at an average of seven weeks to get an assessment, and 13 weeks end to end. That is widely respected as a settled and positive position. To put into context the extent of the improvement, there has been a three-quarter reduction since June 2014 in the time waiting for an assessment. Improvements are ongoing. I regularly meet with stakeholder groups and policy teams and am very much engaged with them.
Not unreasonably, Members have raised the issue of high appeal rates. That was one of the very first questions I asked when I became a Minister. On day one, I said, “Clearly there is something wrong, given the high appeal rates. Everybody down tools immediately and analyse what has gone wrong.” The vast majority of successful appeals, which account for only 2% of total claimants under PIP, are due to additional late submitted evidence, either written or oral.
When we send out a communication to tell somebody that they have not qualified for the level of benefit that they perhaps thought they were entitled to, we try to set out why very clearly. In some cases, those claimants realise that they have not submitted a piece of evidence. We then give them two further opportunities to submit that evidence: one is the mandatory reconsideration, and if they are still unhappy, there is the independent appeal process. We try to be as clear as we can be.
In a utopian world we would have a big supercomputer —a former Labour Government tried their best to deliver this; unfortunately, from our perspective, that did not work—and a claimant would phone and give their national insurance number, and we would have access to all of their medical records. We would not have to rely on late submitted evidence. We are trying to improve that; we have just announced that assessors will get an additional 10 working days to help claimants gather that evidence.
I also gently remind Members that, under the DLA, 70% of claimants were given an indefinite award. That sounds good, but the reality is that the condition of one in three claimants changes significantly within 12 months. If they are on an indefinite award, they may not necessarily pick up the phone and ask for a review. We were seeing more and more people staying on a lower rate of benefit indefinitely, because that is the point at which they entered, when in fact they were entitled to a higher rate. That is another reason why we are seeing the difference between the 16% and the 22.5%.
We all support the principle of halving the disability employment gap. Giving those with a disability the opportunity to work is good for them. On my visits with stakeholder groups—particularly with young ambassadors —I say, “You are the Minister for the day. What would you like to do?” Time and again they want the same opportunities that their friends take for granted. We are making progress: 152,000 more disabled people are in work in the last year, and 292,000 in the last two years. There is still a significant way to go.
We have secured additional funding for access to work, which helps about 36,500 people a year; we have funding to help a further 25,000 per year. That is the Government contributing to remove barriers to help people with disabilities into work. We are doing a lot of work at the moment on how we can promote the scheme, particularly to small and medium-sized enterprises that are often too busy to notice Government initiatives. I want to see a lot more business engagement, so that they understand the importance of this. We are keen to make sure that that money is well utilised. There are further opportunities. A lot of emphasis is going into providing jobcentre staff with additional training, particularly with things such as the hidden impairment toolkits, which the stakeholder groups are helping to design.
The hon. Member for City of Chester used the phrase “waste of talent”. That is absolutely spot on. Businesses that are struggling to fill skill gaps are missing out. I say this as somebody who benefited directly from employing disabled people in my former life, when I ran my own small business. The White Paper is a real opportunity to make some of those significant differences.
Many Members have raised concerns about the ESA work capability assessment. That is not directly my responsibility, but I understand the points raised. As it stands today, typically 1% of those on ESA will come off the benefit every month. That is the same for this Government as it was for the coalition Government, and the Labour Government who introduced it in the first place. There is no way of describing that as anything other than unacceptable, and the White Paper is a real opportunity for us to look at that. I was asked if I could give a sneak preview; I genuinely cannot.
We want to work with those stakeholders. The new Secretary of State has made it very clear that they will be at the heart of what we do. I personally know from my regular meetings with them that they have fantastic policy teams. There is no point in reinventing the wheel when often they have some very good, constructive ideas. The themes that we will be building around are those localised solutions, tailored to the individual, and recognising that everybody has their own unique challenges and opportunities.
From my perspective, we need to make sure that we do not forget that we need businesses to engage. It is one thing getting the individuals looking for work to play by the rules and engage in the different work programmes, but if there are not job opportunities at the end they will continue to loop through the system, attending yet another 12-week programme, during which their enthusiasm will further wane.
Many Members touched on universal credit. Again, I think there is accepted support for the principle. It is simplified—someone would have to be a nuclear physicist to navigate the current complex array of benefits that they might or might not be entitled to. We all know through our casework that individual constituents often miss out.
However, the area that most excites me is that for the first time ever, people will have a named coach. Time and again, people are frustrated that they have to go and explain their challenges to another person, which creates further frustration and reasons not to engage. That named coach will be there to provide support, helping people to navigate not only their opportunities to get into work, but other challenges that they might have—such as accessing child care, additional support and dealing with issues such as personal debt—and signposting them through to additional training. For the first time ever, that named coach will continue to support people when they go into work. If someone goes into their first job, perhaps on the national living wage, and keeps turning up and doing the right thing, the named coach might say, “Do you want me to speak to the supervisor to see if you can get promoted to other roles?”—doing things that we would often take for granted and helping people with opportunities.
We all quote different papers with figures that suit our argument, but the Office for Budget Responsibility has said that households will be £100 billion a year better off by 2020. We have introduced the national living wage. I know that some hon. Members will question—perhaps tongue in cheek—whether that is genuinely a national living wage, but we are anticipating it to be more than £9 by 2020. I seem to recall from my opponent’s election leaflets that he was advocating just over £8, so it is £1 higher than the Opposition proposed.
Rightly, we have been increasing the personal allowance. It will go up to £11,500 by April 2017 and will continue to rise to £12,500. We have legislated that it will then follow inflation. Living standards reached their highest ever level in 2015 after growing at their fastest rate in 14 years. Living standards have improved by 2.6% over the last year and employment has gone up by 2.4 million since the 2010 election.
Justin Tomlinson
I am very short of time, and I want to deal with a few more specific points that Members have raised.
I pay tribute to the hon. Member for Ross, Skye and Lochaber (Ian Blackford) because, although we may disagree on many of the points raised, he makes very clear alternative suggestions. It is one thing to criticise the Government but, to his credit, he sets out how his party would do things differently. I have always said that I will look very closely at what our friends in Scotland do. If something works there, we will be first in the queue.
The hon. Member for Glasgow Central (Alison Thewliss) made a very powerful point—and has done so consistently for a period of time—to do with rape. Lord Freud has said that he is going to look further at that, and I pay tribute to the hon. Lady for making powerful points in that area.
On the points made by hon. Members about women, I would say that tax-free childcare for working families— 30 hours a week of free childcare for three and four-year-olds—will make a significant difference. Two thirds of the 2.8 million people who have directly benefited from the national living wage are women, and, on the increased personal allowance, 59% of the people who have been taken out of paying any tax at all are women. These are key issues.
There is still much more to do. My door is always open to Members who have constructive suggestions and ideas on how we can make improvements. I want finally to pay tribute to the hon. Member for Strangford (Jim Shannon); he has often taken up that opportunity and those are the sorts of things that shape the way in which the Government are helping to support the most vulnerable in society.